Highlights
Conrad Asia Energy , an Asia-focused natural gas exploration and development company, has signed a binding Gas Sales Agreement ('GSA') for the sale and purchase of the export portion of natural gas from the Mako gas field with Sembcorp Gas, a wholly-owned subsidiary of Sembcorp Industries, a leading energy and urban solutions provider, headquartered in Singapore.
The GSA with Sembcorp for gas from the Mako gas field (in which Conrad has a 76.5% Participating Interest), is an important next step in the commercialisation of Mako field, the largest undeveloped gas field in the West Natuna Sea. With this GSA and the gas sold under a separate domestic market obligation ('DMO') GSA with PGN, Indonesia’s largest gas company(1), all of Mako’s current gas Contingent Resources have been committed to gas buyers.
Completion of both GSAs is a significant milestone on the path to a Final Investment Decision ('FID') for the Mako project targeted for Q4 2024(2).
Natural gas is an essential transition fuel in the energy mix across Asia and the sale of all Mako’s contingent resources gas resources represents an important project in Asia. Mako is one of several gas resources in Conrad’s Asian portfolio as it continues to pursue the development of gas across the region.
- On 31 August 2024, Conrad and Sembcorp signed a binding GSA for the export of gas produced from the Mako field to Singapore.
- The contract term is until the end of the Duyung PSC in January 2037 and allows for the sale of up to 76 billion British thermal units per day ('Bbtud'), which is equivalent to around 76.9 million standard cubic feet per day ('mmscfd').
- The GSA also contains provisions for the sale of up to an additional 35 Bbtud (around 35.4 mmscfd) should a tie-in pipeline not be built to the Indonesian domestic market in Batam and DMO sales do not therefore eventuate. The possible export of these additional volumes is recognised in the Mako plan of development ('POD ') 1 Revision.
- The terms of the GSA are confidential and are subject to government approval.
Conrad Managing Director and Chief Executive Officer, Miltos Xynogalas, commented:
The GSA between the Mako Joint Venture, the Indonesian Government and Sembcorp is the most significant event in the company’s history as it has progressed Mako from an exploration concept in 2017 to a gas development project in 2024(3). This GSA is the essential document that underpins the financial viability and the value of the project.
This is an important step for Conrad in the commercialisation of the Mako Gas Field and building its gas business in Asia. Conrad has been working closely with Sembcorp for over a year and is delighted to have progressed this to a formal GSA.
Combined with the PGN GSA4, the two GSAs are significant milestones on the road to FID which is targeted for the end of this current year. With these GSAs now signed, Conrad can continue to progress its farmout discussion and taking Final Investment Decision (FID).
Mako is the first of what we believe will be several gas projects that Conrad aims to bring into commercial production from its existing portfolio of gas discoveries which includes its gas resources in Aceh. Asia has the fastest gas consumption growth in the
world as its economies transition away from coal to the cleaner burning natural gas and we are proud to be involved in this
transition.
Duyung PSC - Mako Gas Field 76.5% Participating Interest, Operator
Conrad holds a 76.5% operated interest in the Duyung PSC via its wholly owned subsidiary West Natuna Exploration Limited. Duyung is located in the Riau Islands Province, Indonesian waters in the West Natuna area, approximately 100 km to the north of Matak Island and 400 km northeast of Singapore. The Mako field contains 2C Contingent Resources (100%) of 376 billion cubic feet (“Bcf”), (of which 187 Bcf are net attributable to Conrad(5)) and is scheduled to begin production in 2026. The West Natuna Sea has been supplying Singapore with natural gas for more than two decades and Mako is expected to extend this
supply for at least another decade via the existing transportation system.
On 31 August 2024, Conrad and Sembcorp signed a binding GSA for the export of gas produced from the Mako field to Singapore.
The contract term is until the end of the Duyung PSC in January 2037 and allows for the sale of up is 76 Bbtud which is equivalent to around 76.9 mmscfd.
The GSA also contains provisions for the sale of up to an additional 35 Bbtud (around 35.4 mmscfd) should a tie-in pipeline not be built to the Indonesian domestic market in Batam and DMO sales do not therefore eventuate. The possible export of these additional volumes is recognised in the Mako plan of development ('POD ') 1 Revision.
The terms of the GSA are confidential and are subject to government approval.
A formal signing ceremony, in the presence of SKK Migas, will be arranged at a later date.
Source: Conrad Asia Energy
